Kenya has raised Ksh106.3 billion ($820 million) from the initial public offer (IPO) of the Kenya Pipeline Company (KPC), after the sale drew a 105.7 percent subscription led by regional and local institutional investors.

 

The offer – Kenya’s largest privatisation in nearly two decades – attracted strong participation from East African Community (EAC) investors, particularly Uganda, alongside domestic pension funds and other institutional buyers.

Presenting the results on Wednesday, National Treasury Cabinet Secretary John Mbadi said the outcome reflected investor confidence in Kenya’s capital markets and economic fundamentals.“The finalisation of the KPC IPO is a significant milestone. At its core, it speaks to how the government prudently manages its assets,” CS Mbadi said.“The successful KPC IPO is a clear reflection of the maturity of Kenya’s economy.”The government sold a 65 percent stake in KPC, equivalent to 11.8 billion shares, through the Nairobi Securities Exchange (NSE).

The shares were priced at Ksh9 ($0.07) each in an offer that opened on January 19 and closed on February 24 after a three-day extension, following debate among investors over the valuation.

Oversubscribed offerInvestor applications reached 12.4 billion shares, exceeding the available allocation and pushing the offer above its target.

The government accepted Ksh106.3 billion ($820 million) in bids. With no green shoe option allowing additional share sales, the government will refund Ksh5.4 billion ($41.7 million) from excess applications.

The shares will begin trading on the Nairobi Securities Exchange on Monday.

Local institutional investors – including the National Social Security Fund (NSSF) – emerged as the largest shareholders, collectively taking a 41 percent stake. The government will remain the second-largest shareholder through its retained 35 percent stake.

EAC investors will hold 21.2 percent of the company, largely reflecting investments by the Uganda National Oil Company (UNOC), alongside smaller purchases by Rwanda’s pension funds.

Funding strategyThe sale comes as Kenya seeks alternative financing amid rising public debt, limited room to raise taxes and annual debt repayments that consume about 40 percent of government revenues.

Officials say proceeds from the offer will be channelled into infrastructure financing.“The proceeds from the IPO shall be deployed into the national infrastructure fund, a vehicle proposed as the premier economic engine,” CS Mbadi said.

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